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Referral Program: What You Need To Know

women uses megaphone for word-of-mouth advertising and telling friends about referral program.

Do you want to increase your business and profitability? Then, it’s time to start using a referral program that will help you get more new customers coming in the door. Read our post to learn about the benefits of a referral program, as well as a three-step process to set one up for your own business!

Referral Program: What You Need To Know

Every successful business owner knows the power of word-of-mouth advertising.
What if you could take that power and turn it into a trackable system?

That is the power of a referral program!

What Is A Referral Program?

A referral program is a word-of-mouth marketing system that incentivizes customers to advocate on behalf of your business.

(Your business may also benefit from Building an Affiliate Program.)

Why Should You Use a Referral Program?

There are many benefits of using a professional referral program for your business.

1. Increases Overall Referrals
A great program makes it easy for your customers to refer to their circle with the use of pre-made messaging, sharable content, and a clear reward system. The easier the program, the more likely your business will be recommended.

2. Decrease Advertising Costs
Referral programs have fixed rewards that are performance-based. After all, you only provide one reward per referral and only if the referral performs an agreed-upon action. Therefore, using a referral program results in a lower overall cost than other types of advertising.

3. Better Leads
Not only do you increase the number of leads, but the quality of your leads increases. Your customers are going to put more thought into who would benefit the most from your business. As a result, the extra consideration will ensure that the new lead is an excellent fit.

With these amazing benefits in mind, let’s take a look at some important steps every business should consider before starting its own referral program.

3 Steps Create A Referral Program

Step 1: Create Clear Messaging

The way your referral program is designed can have a big effect on the success of the program.

Use these helpful tips below to guarantee your message will resonate with your customers and their referrals:

Create A Headline That Converts

A great headline for a referral program is the same as a great elevator pitch for your business. The headline should explain the incentive and how your customer will benefit in one simple sentence. You will often see this demonstrated with programs that mention “Give $20, Get $20.”

Provide Multiple Ways To Share

Give your customers a few easy ways to share your program to increase its effectiveness. The use of referral software, email marketing, or referral widgets are just a few ways to help your customers refer their friends with a few easy clicks.

Design Customizable Templates

When you design your pre-made template, be sure to include what benefits your program offers, a clear CTA, and a personal touch. The use of pre-made messaging is just another way to make the program easier to share with your customers. In addition, you can let your customer add their own personal touch to each referral with an option to edit the message.

Now that your message is clearly defined, you must determine how you will motivate your customers to promote your referral program.

Step 2: Determine Your Reward Structure

There are many options to consider when you are setting up your reward structure for your referral program.

Ask yourself these three questions to help determine what reward structure you want to create for your program:

Who Will Benefit From The Reward

There are three options you can choose from when determining who will benefit from your referral program. You can opt to use a one-sided incentive, a two-sided incentive, or the less popular option no incentive. The most common business practice is to offer a two-sided incentive. For example, you will offer a reward to your customer and their referral.

What Type Of Reward Should I Offer?

The most successful referral programs use a reward that a customer would perceive as a real value to them. Monetary rewards tend to captivate the most attention, however, studies have determined your customer may be more satisfied with a more personalized reward. Review your current customers and ask yourself what reward would they most enjoy? Secondly, does that reward make sense for your business?

How Will My Customer Earn Their Reward?

The reward structure can determine how successful your referral program is over time. The standard reward structure will offer your customer the same reward for each referral but this can cause interest to stagnate. Tiered reward structures offer a higher incentive which each new referral. Even more complex, is a multi-step structure that will incentivize each step in the referral program. Finally, if you are looking to create some extra excitement about your referral program, a gamified reward structure will offer a higher-value incentive for a set time period.

By using these three questions, you can determine the best reward for your customers and encourage them to start sending referrals your way.

Finally, you must establish how your referral program will be managed.

Step 3: Streamline With Software

Referral programs tend to have many components that must be managed properly to ensure your program is effective. Therefore, referral software can provide the solutions your business will need to streamline all of the moving parts and keep your customers happy.

Here Are 10 Benefits Of Referral Software:

  1. Provide Analytics
  2. More Sharing Options
  3. Easy Promotion
  4. Referral Tracking
  5. Customer Engagement
  6. Automated Rewards
  7. Prevents Fraud
  8. Customizable Branding
  9. Personalized Experience
  10. Technical Support

Referral Program Summary

If you are considering starting your own referral program, this post should have given you some helpful tips for getting started.

Furthermore, referral programs are a great way to get the word out about your business and increase sales!

Infusionsoft Services With CVA

A successful referral program has many technical components that can be made easier with the help of our Infusionsoft Certified Consultants.

If you are ready to leverage the benefits of working with referral partners to increase your revenue, our ICC’s will help set up your commission structure, import current partners, create a referral partner welcome campaign, upload promotional material, and more. Learn more about how our ICC’s can help you start your program today: Infusionsoft Referral Partner Center.

(If you want to learn more about the many benefits of Infusionsoft, read our article: Can Infusionsoft Help Your Small Business Grow?)

Posted on October 12th, 2021 by Client Advocate Team

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